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(CNS Business): A hedge fund has seized an Argentine navy ship in Ghana following a court order, according to various international news reports. Bondholders who are suing Argentina in the international courts over the 2002 debt default to recover the full value of the bonds have sought to freeze state assets. NML Capital Ltd, a subsidiary of US hedge fund Elliott Capital Management owned by billionaire Paul Singer, had sought the court order and the Libertad, an Argentine flagship frigate that is used as a training vessel, will now only be able to set sail if Ghanian courts lift the order. NML and EM Ltd, a Cayman-based fund owned by Kenneth Dart, are among the investors who want to force Argentina to pay the full value of defaulted bonds that weren’t swapped in two restructurings.
About 94 percent of the securities were exchanged in 2005 and 2010 through offers that gave creditors about 30 cents on the dollar.
"The vulture funds have crossed a new line in their attacks on Argentina," a Foreign Ministry statement said.
"The Foreign Ministry has already approached the African nation to clarify the stunt pulled by the unscrupulous financiers," Argentinian officials added.
International reports state that Elliott has taken the navy ship, which has 200 sailors on board, via its NML Capital affiliate, which convinced a court in Ghana, where the ship was docked, to detain the vessel based on the court order delivered earlier this year. It was reported that Elliott had been waiting for the ship to stop in a port where it would have a chance to enforce the legal judgments by both UK and US courts. The Libertad has been estimated in value at between $10m and $15m.
The vessel, a tall ship used by the Argentine Navy to train sailors and a former holder of the world speed record for a transatlantic crossing by sail, is free to leave the Ghanaian port if Buenos Aires posts a bond with the court, the Financial Times in London reports. However, the Argentine government said that the move is in violation of the Vienna Convention on diplomatic immunity.
A statement from the Argentinian foreign ministry said: “The vulture fund NML has its headquarters in the Cayman Island, a fiscal lair that it’s worth recalling is a colony of Great Britain, from which those who don’t submit themselves to the laws of any jurisdiction operate and they’ve been denounced both by the G-20 and the United Nations.
“The Foreign Ministry reiterates that it is the decision of President Cristina Fernández de Kirchner to not bow before the international and local attempts at extortion that have been brought forth by the vulture funds and will continue to denounce them in various forums such as the G-20, the United Nations, CELAC, UNASUR and MERCOSUR, FATF and the other multilateral organizations.”
According to all of the reports, the hedge funds involved have refused to comment.
Argentine Navy ship seized in asset fight (Financial Times)
Dart vulture fund set to profit from Greek chaos (CNS May 2012)
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